Basudeo Kejriwal, Bhagalpur V. I.T.O., Bhagalpur

ITA 85/PAT/2014

• Counselvise Citation: [2015] 117 COUNSELVISE.COM (IT) 9158 (ITAT-PATNA)
• Duration Of Justice: 1 year(s) 4 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 19-05-2015
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 15-05-2014
• Court: TRIBUNAL
• Department Lawyers: RAM BABU
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, PATNA SMC BENCH, PATNA BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 85/PAT./2014 ( ASSESSMENT YEAR : 2008-09 ) SHRI BASUDEO KEJRIWAL C/O M/S. NEW LAXMY AGENCY LAHERI TOLA, BHAGALPUR ITO, WARD-1(1), BHAGALPUR PAN ACSPK6460C APPELLANT V/S INCOME TAX OFFICER WARD-1(1), BHAGALPUR .... RESPONDENT ASSESSEE BY : SHRI PAWAN SHARMA, ADVOCATE REVENUE BY : SHRI RAM BABU, D.R. DATE OF HEARING 02.08.2016 DATE OF ORDER 02.09 .2016 O R D E R INSTANT APPEAL PREFERRED BY THE ASSESSEE IS DIRECT ED AGAINST THE IMPUGNED ORDER DATED 4 TH FEBRUARY 2014, PASSED BY THE LEARNED COMMISSIONER (APPEALS)I, PATNA, FOR THE ASSESSMENT YEAR 200809. 2. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS THAT , THE LEARNED COMMISSIONER (APPEALS) ERRED IN CONFIRMING THE DISA LLOWANCE OF ` 5,92,267 UNDER SECTION 40A(3) OF THE INCOME TAX ACT, 1961 (F OR SHORT THE ACT ). 3. FACTS IN BRIEF : THE ASSESSING OFFICER NOTED, THE ASSESSEE HAS MADE CASH PAYMENT EXCEEDING ` 20,000 TO MULLER & PHIPPS (INDIA) LTD., PATNA, ON VARIOUS DATES TOTALING TO ` 5,92,267. IN EXPLANATION 2 SHRI BASUDEO KEJRIWAL THEREOF, THE ASSESSEE SUBMITTED, THE PAYMENT HAS BE EN MADE TO THE SAID PARTY BECAUSE THE SELLER REFUSED TO ACCEPT THE PAYMENT BY WAY OF OTHERWISE THAN BY CASH. THE ASSESSING OFFICER OBSER VED, THE ASSESSEE HAS NOT FURNISHED ANY SUBSTANTIAL EVIDENCE / PROOF FOR NOT ACCEPTING THE ACCOUNT PAYEE CHEQUE / ACCOUNT PAYEE DEMAND DRA FT. THE SUPPLIER IS SITUATED IN THE HEART OF THE CITY IN PATNA. IN T HE CIRCUMSTANCES IN WHICH THE PAYMENT WAS MADE IN CASH, ARE ALSO NOT CO VERED UNDER RULE 6DD OF THE I.T. RULES, 1962, HENCE, THE ASSESSING O FFICER HELD, THE SUBMISSION OF THE ASSESSEE IS SELFSERVING AND IRRE LEVANT AND ACCORDINGLY, ADDED THE SAID AMOUNT OF ` 5,92,267 TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 40A(3). 4. UPON ASSESSEES APPEAL, THE LEARNED COMMISSIONER (AP PEALS) CONFIRMED THE ADDITION. BEING AGGRIEVED, THE ASSESSE E IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATER IAL ON RECORD. I FIND, THE ASSESSEE HAS MADE PAYMENT IN CA SH IN VIOLATION OF PROVISIONS OF SECTION 40A(3) OF THE ACT. IN EXPLANA TION, IT HAS BEEN SUBMITTED, THE PAYEE REFUSED TO ACCEPT THE PAYMENT OTHERWISE THAN BY WAY OF CASH. NO EVIDENCE IN THIS REGARD HAS BEEN BROUGHT ON RECORD. NO SUCH EVIDENCE WAS FURNISHED BEFORE THE T RIBUNAL ALSO. IT IS NOT KNOW AS TO WHY SUCH CASH PAYMENT IS MADE IN THE HEART OF THE CITY. NO PROPER EXPLANATION WHATSOEVER HAS BEEN MAD E IN THIS REGARD. 3 SHRI BASUDEO KEJRIWAL AS RIGHTLY OBSERVED BY THE AUTHORITIES BELOW, THE P AYMENT IN CASH IS NOT COVERED UNDER THE EXCEPTION CARVED OUT IN RULE 6DD. 6. THE LEARNED COUNSEL FOR ASSESSEE HAS PLACED RELIANC E UPON THE DECISION OF THE HONBLE MADRAS HIGH COURT IN T.C.A. NO.317 OF 2008, HOTEL NAGAS PVT. LTD. VS CIT, JUDGMENT DATED 7 TH APRIL 2016. THIS CASE LAW PERTAINS TO INVOCATION OF BENEFIT UNDER RULE 6D D(J). AS PER THE PROVISIONS OF THE I.T. RULES, 1962, IT PROVIDES EXE MPTION WHEN THE PAYMENT IS MADE IN CASH EITHER DUE TO EXCEPTIONAL O R UNAVOIDABLE CIRCUMSTANCES; OR DUE TO THE FACT THAT HAVING REGAR D TO THE NATURE OF TRANSACTION AND NECESSITY FOR EXPEDITIOUS SETTLEMEN T, IT WAS NOT PRACTICABLE TO MAKE PAYMENT BY WAY OF CROSSED CHEQU E OR DEMAND DRAFT. THE HONBLE MADRAS HIGH COURT IN HOTEL NAGAS PVT. LTD. (SUPRA) HAS UPHELD THE DELETION WHEN THE PAYMENTS WERE MADE TO AGRICULTURISTS IN CASH AND THE AGREEMENT WAS REGIST ERED BEFORE THE SUB REGISTRAR. 7. I FIND, THE ABOVE CASE LAW IS CLEARLY NOT APPLICABL E TO THE FACTS OF THE PRESENT CASE. NO CIRCUMSTANCES WARRANTING INVOC ATION OF PROVISIONS OF RULE 6DD(J) HAVE BEEN BROUGHT ON RECO RD. SUBMISSIONS OF THE ASSESSEE THAT THE PAYEE INSISTED FOR CASH PAYME NT IS NOT BACKED BY ANY COGENT EVIDENCE WHATSOEVER. THE AUTHORITIES BELOW IN THIS REGARD HAVE HELD THE STATEMENT OF THE ASSESSEE AS S ELFSERVING STATEMENT WHICH IS DEVOID OF COGENCY. UNDER THESE C IRCUMSTANCES, I 4 SHRI BASUDEO KEJRIWAL DO NOT FIND ANY INFIRMITY IN THE ORDERS PASSED BY T HE AUTHORITIES BELOW. THE GROUND RAISED BY THE ASSESSEE IS DISMISSED. 8. IN THE RESULT, ASSESSEES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 02.09.2016 SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER PATNA, DATED: 02.09.2016 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, PATNA CITY CONCERNED; (5) THE DR, ITAT, PATNA; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY A.R. / SR.P.S./P.S. ITAT, PATNA